Sheenlac Paints may buy out Jenson and Nicholson's stake in JV

Kolkata, Feb. 23 -- Sheenlac Paints Ltd, which entered into a 49:51 joint venture (JV) with Jenson and Nicholson India Ltd last year, may seek to buy out its partner once the JV company scales up its revenue to Rs350 crore in five years, chief executive officer Sridhar Krishnamoorthy said on Wednesday.
Over the next couple of years, Chennai-based Sheenlac will invest Rs50 crore into the operations of Jenson and Nicholson Paints Pvt. Ltd, while Jenson and Nicholson will provide intellectual capital, including its brands such as Robbialac, Decor, Rainbow, Safeguard and Special Effects.
Sheenlac initially wanted an equal stake in the JV, but that did not work out. However, the JV agreement has a provision allowing Sheenlac to raise its stake or bring in a strategic partner in five years, Krishnamoorthy said.
Although a minority partner, Sheenlac has management control of the JV. Both partners have equal representation on its board.
In its first year of operation, the JV had targeted revenue of Rs100 crore. "We have met 70-80% of the target," Krishnamoorthy said.